PPP funds benefit rich firms – IBON

2016 budget includes allocation to pay for right-of-way in 13 road, expressway projects

Contrary to President Benigno Aquino 3rd’s claims that the government is not spending for public-private partnerships (PPPs) and that the private sector is even paying the government, billions of pesos are again allotted for selected PPP projects in the proposed 2016 national budget, an economic research group has revealed..

Like in the 2015 budget where funds were allotted to support big business profits, initial estimates made by IBON Foundation find that the 2016 National Expenditure Program (NEP) also has some P65.9 billion allotted for a handful of PPPs implemented by the country’s richest corporations.

This is an increase from the P52.7 billion PPP budget in 2015, the research group said in a statement posted on its website.

Also maintained is the P1.6 billion fund for amortization and lease payments on school buildings constructed by Henry Sy’s Megawide Construction Corp. and its consortium partners.

Moreover, there is a large increase in PPP strategic support funds which go more than double to P24.8 billion. These cover expenses for right-of-way acquisition and displacement of informal settlers by at least 13 road and expressway projects of or eyed by the Ayala Corporation, San Miguel Corporation, Metro Pacific, Megawide, Aboitiz Equity, JG Summit and a few other big corporations.

The 2016 NEP also includes at least P9.5 billion for various Light Rail Transit (LRT) and Metro Rail Transit (MRT) projects, both of which are privatized or in the middle of privatization.

Rail fares were already hiked substantially at the start of the year but additional LRT fare hikes are already being eyed by Metro Pacific and Ayala Corporation, the private sector winners of the LRT Line 1 expansion and operation project.

Prone to abuse
IBON Foundation also said the proposed 2016 national budget is vulnerable to abuse in the critical election year.

There are large lump-sum amounts including suspiciously for local governments, as well as an apparent attempt to give the administration greater flexibility to declare savings and transfer funds in the middle of the year.

The NEP has greatly increased the amount of special purpose funds (SPFs).

The SPFs are notorious for having large lump-sum amounts that do not undergo congressional or public scrutiny. SPFs increased by a substantial Php61.7 billion to reach Php430.4 billion in the proposed 2016 budget, IBON noted.

Among the SPF items is a conspicuous 69 percent increase (P23.1 billion) in the allocation to local government units (LGUs) to P56.5 billion.

The new SPF for LGUs includes an almost 500 per cent increase (P15.3 billion) in a so-called local government support fund to Php18.4 billion, from being just Php3.1 billion in 2015.

“It is widely accepted that LGUs, up to the barangay level, are the base in ensuring electoral victories for national candidates especially in presidential races,” IBON said.

The Department of Interior and Local Government (DILG) in particular also has budget items which appear inconsistent with its mandate to promote peace and order, ensure public safety, and strengthen local government capability.

The proposed 2016 budget includes P8.3 billion for DILG housing, water and other community projects that are presumably the purview of other government agencies.

This includes P643 million for housing in the National Capital Region (NCR), P1.8 billion for water supply projects nationwide, P1.8 billion for community projects in armed conflict-affected areas, and P4.1 billion for bottom-up budgeting (BUB) projects for water supply and other projects.

Increased SPFs for LGUs and redundant DILG allocations disprove the administration’s claim that pork barrel items no longer exist in the national budget, IBON said.

PPP’s are BOT derivatives din naman e. So like in BOT wherein the rightful contractor undertakes the construction, including financing, operation and maintenance. Does the government still needs to give them FUNDS for these? Kasi after finishing the construction of any facility under the PPP Law the contractor will be the one operating the finished project on an agreed term, it will also allow them to charge fees, rentals, tolls, etc to recover their investment sa projects, plus may mga incentives or guarantees pa na binibigay ang gobyerno sa mga ito. Yun lang i-allow sila to operate whatever facilities they’ve built under the PPP e, say 25 or 30 years and sobra-sobra na to recover their costs. Then eto may parang pabaon pa sa umpisa pa lang ng mga projects sa kung sino man contractors nai-award yung PPP projects… YES we all agree na dapat yung PPP sa malalaking firms ibigay kasi sila ang may capability to do pero wag naman sana masyado galante na sa-onset pa lang ng projects WE are giving additional fundings na to these firms na suppose to be sa kanila (firms) naka-assign as agreed under the PPP principle…

Well said, JRT. The question is not who builds the facilities, but whether they are built (and possibly operated, depending on the terms of the PPP) more economically and more expeditiously than through conventional methods (i.e. do PPPs save the public money), and in keeping with sound engineering principles and construction methods.

Public Private Partnerships is an oxymoron. They can not happen in the real world. Private corporations are in search of profits and are not motivated to do public good. Who ever thought this one up was only thinking of how they could personally benefit. This is a sure sign of corruption.

The Aquino Administration is moving ‘Heaven and Earth’ the more to manipulate our National Budget for Mar Roxas (the Aquino’s anointed) and the Aquino’s Yellow leaders to be assured of winning this coming election. Should this happen, BS Aquino could evade his jail term after he steps down from the presidency.

IBON need to fly high to see the bigger picture. PPP is historically awarded to large firm and not small firm which is prone to corruption. Large will be able to plan and execute the project more effectively and efficiently than smaller firms.
It’s not true that the budget is prone to abuse during the time of PNOY perhaps his predecessors were. Simple reason, the current government has excellent controls and audited by professional people. If one has to believe I will believe the government agency and NOT IBON Foundation which is surely wasting the money of the foundation.

in 1986, then Pres. Cory Aquino mothballed the operation of the Bataan Nuclear Power Plant, although the Philippines continuously paid billions of pesos for this power plant. To justify the mothballing of the BNPP, critics of Marcos released exaggerated stories that the power plant has thousands of defects and lie on an earthquake fault line, which Philvocs officials denied.

Comes 2010. Pres. Noynoy Aquino axed the key flood control project of his predecessor, Laguna Lake Rehabilitation Project. Part of plan to save the lake is to dredge 4.6 million cubic meters of silt and waste so it would contain more floodwaters.

As a result of Mr. Aquino’s reckless, unilateral cancellation of the project, P6 billion of taxpayers’ money could be lost. Firstly, government has to pay P420-million penalty for the cancellation of the bank loan.